How To Apply For A Business Credit Card

Applying for a business credit is similar to applying for a personal credit card. Ideally, you would apply for the card without using your SSN and avoid making a personal guarantee. But unless you have a significant business credit history, the issuer is likely going to require that you personally guarantee the credit card account. Business credit cards are an essential tool in managing your business expenses. You do not want to co-mingle your personal and business expenses for any reason. It will be a nightmare when it's time to prepare your taxes.

Higher Credit Limits
Business credit cards typically have higher credit limits than personal credit cards making it easier to use the card for major business expenses. It's not uncommon to see cards with a $50,000 - $100,000 credit limit.

Build Business Credit
A personal credit card generally can not help you build business credit, though your business and personal credit may be linked. Using a business credit card and paying the bill on time is one way to help build your business's credit. Your business credit can impact your business&'s ability to qualify for loans, credit lines, terms from vendors and equipment or office leases. Your business credit can also impact how much you will pay for business insurance. If you are a sole proprietor, your personal credit may also be considered when you apply for business-related financial products. Opening and using a business credit card is a great way to build business credit.

Separate Business Credit
Why should you be concerned about keeping your business and personal finances separate? Legal liability, easy bookkeeping, and good financial hygiene—both for you and your business alike. Establishing a financial firewall between you and your business (even if your business is just you on your own!) is pivotal for your own protection and sanity come tax time. And, above all, seriously important for protecting your personal assets. If you intermingle your personal expenses and business expenses, you could ultimately lose the very legal protection you hoped to gain by incorporating or organizing a limited liability company.

Business Perks
Business credit cards often offer similar benefits, but they are tailored to the needs of business owners. For example, your card could come with:

  • If you choose a business card with a provider that has a wide range of products that serve businesses, it can be the start of a strong financial relationship. Banks offer many business credit products and financial services that meet small business needs no matter where they are in the lifecycle of their business. Some business credit cards offer extended working capital and simplifies the management of everyday financial transactions.

  • Business-specific rewards programs. You could get a card that offers cash back rewards on shipping, advertising and other common business purchases.

  • Free employee cards. You can give your employees a card so they can easily make purchases on the business&'s behalf. You can monitor their spending and control where they can use the card and how much they spend.

How to get a business credit card

Even though there are a lot of differences between business and personal credit cards, the process for applying is similar. Here's what you should do if you are trying to get a business credit card.

Lenders may also consider other factors about both you and your business, such as…

If you do not have business credit, you may need to work on building it before you can be approved for the best business credit cards. One way to do that is with a secured business credit card.

For example, a freelance graphic designer with monthly expenses for design software might consider a business credit card with cash back for general purchases. But a business owner who travels frequently might consider a business card with travel rewards instead.

If you are working on building your business credit, know that not all business credit cards report to business credit-reporting agencies. If you get a card from an issuer that doesn’t, you won’t build your business credit. Before you apply, ask the credit card company if it reports to a business credit-reporting agency.

Compare each card side-by-side so that you can make the best decision and minimize the number of cards you apply for — too many hard inquiries will impact your credit scores.

  1. Check your personal credit
    Before you start the process of applying for a business credit card, check both your personal and business credit. Both can be considered when you apply.The interest rate you pay on business loans and credit cards

    • Business revenue

    • Business expenses

    • Personal income

  2. Research business credit card options to find one that fits your needs
    There are several different types of business cards, so make sure to keep your business needs in mind. It is important to consider the type of business you have and how you can maximize your rewards based on your business-spending requirements.

  3. Apply for a business credit card
    Once you have found the right business credit card for you, fill out an application.

    Most credit card companies will accept an application online, where you will be provided with a decision. If you do not receive an immediate decision, your application will be reviewed and a decision will be sent to you.

    The application will likely ask for your personal and business information, including…

    • Legal business name
    • Business address
    • Type of business
    • Business phone number
    • Tax identification number
    • Annual business revenue
    • Years in business
    • Monthly business expenses
    • Personal income
    • Social Security number
    • Date of birth

  4. Wait for your business credit card in the mail and use it wisely
    If you have been approved, all you need to do is wait for your card to arrive in the mail. If you applied online, most credit card companies will mail your card within seven to 14 business days. Once you receive your business card, activate it and start using it wisely.

    • Carefully review the terms of any related rewards program so you can reap the maximum benefits of your business card.

    • Avoid mixing personal and business-related expenses on your business credit card. Doing so will help you when it is time to sort out your accounting information during tax season.

Bottom line

If you are a sole proprietor or small-business owner, the right business credit card can help you build your business credit if you use it responsibly. But if your business does not have an income yet or you do not have business credit, be prepared to prove your creditworthiness based on your personal credit history and income.

Once you have received your card, use it responsibly to further grow your business and your business credit.